Taxation Institute Calls for Comprehensive Review of GST

Australia’s premier professional tax body, the Taxation Institute of Australia, today urged the Federal Government to establish a comprehensive review of the GST.

The Taxation Institute’s call comes with the release of its 40 page submission to the Board of Taxation’s Review of the Legal Framework for the Administration of the GST which identified almost 30 priority recommendations.

President of the Taxation Institute, Sue Williamson, said the GST regime is far too complex, time consuming and costly and should be significantly streamlined.

"This is particularly disappointing when you look at the range of taxpayers required to administer the GST System,” Ms. Williamson said.

“For example, an individual who opens a retail outlet needs to either find money to get an external expert to help them with their monthly or quarterly GST calculations or try to learn how the GST system applies.

“If they adopt the latter course they expose themselves to penalties as this system is too complex for a sole trader with no formal tax training to understand. The resources directed by small business to trying to comply with their GST obligations would be better directed in a focus on the direct operation of the business. "

The Taxation Institute expressed disappointment at the GST exclusion from the review.“It’s unfortunate that the Federal Government carved out GST from Australia’s Future Tax System review,” Ms. Williamson said. “Even though it’s only in the early stages, the Board’s review has already highlighted the need for the Government to open up this system to a full review beyond the scope of the Board’s current examination of the administration of the GST.”The wide ranging Taxation Institute submission, which was developed by some of the country’s leading GST experts, makes recommendations relating to:

Ms. Williamson also said the focus on GST brought about by the Board of Tax review has highlighted the reality that the complexity, uncertainty and compliance costs of GST - which was introduced into parliament 10 years ago - has become worse over time.

“When GST commenced, there was general concern about the complexity of the system and how it works. Today – almost a decade since the GST was introduced - there is continued confusion in respect to its administration, scope and rate,” Ms Williamson said.

“However our recommendations are only scraping the surface of the mountain of GST issues that taxpayers and tax professionals have to contend with regularly.

“The recent sessions by the Board of Tax for their limited review identified some 80 pages of issues with GST and there has been the need for the ATO to make rulings on some 90 issues since 2002.

“It is essential that the Government opens up this system to a full review to address the current myriad of issues.”

In its submission, the Taxation Institute identified 11 high priority areas that should be addressed immediately to streamline and improve the operation of the GST, reduce compliance costs and remove existing anomalies. There were another three medium high, 12 medium and 2 medium low priority recommendations.

About the Taxation Institute of Australia: The Taxation Institute is Australia’s largest and most diverse body of tax professionals working together to improve the tax system and the delivery of tax services through education, sharing of information and consultation.